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A Comparison and Contrast of Medicare and Medicaid Benefits

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A Comparison and Contrast of Medicare and Medicaid Benefits

Introduction:

Medicare and Medicaid are two government-funded healthcare programs in the United

States that serve different segments of the population. Medicare is a federal health insurance

program for individuals aged 65 years and older, as well as those with certain disabilities and

end-stage renal disease (ESRD). Medicaid, on the other hand, is a joint federal-state program that

provides health coverage to low-income individuals and families. While both programs provide

healthcare benefits, they differ in terms of eligibility requirements, covered services, and funding

sources. In this paper, we will compare and contrast Medicare and Medicaid benefits by

examining their eligibility criteria, covered services, funding sources, and program

administration.

Eligibility Criteria:

One of the most significant differences between Medicare and Medicaid is their eligibility

criteria. Medicare is available to individuals who are aged 65 years and older, those who have

certain disabilities, and those with ESRD. Medicare beneficiaries must have paid into the

program through payroll taxes for a minimum of ten years to qualify for premium-free Part A

coverage. However, those who have not paid into the program may still qualify for Part A

coverage by paying a premium. In contrast, Medicaid is a means-tested program that is available

to low-income individuals and families. Eligibility for Medicaid is based on income, assets, and

family size, with each state setting its own income limits. Generally, individuals with incomes at

or below 138% of the federal poverty level (FPL) are eligible for Medicaid.

Covered Services:
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Medicare and Medicaid also differ in terms of the services they cover. Medicare is

divided into four parts, with each part covering different services. Part A covers inpatient

hospital care, skilled nursing care, hospice care, and home health care. Part B covers outpatient

care, such as doctor visits, preventive care, and diagnostic tests. Part C, also known as Medicare

Advantage, is offered by private insurance companies and provides additional benefits beyond

those covered by Parts A and B. Part D covers prescription drugs. In contrast, Medicaid covers a

broad range of services, including inpatient and outpatient hospital care, physician services,

laboratory and X-ray services, family planning services, and dental and vision care. States can

also choose to cover additional services, such as chiropractic care and physical therapy.

Funding Sources:

Another significant difference between Medicare and Medicaid is their funding sources.

Medicare is funded primarily through payroll taxes paid by employees and employers, as well as

premiums paid by beneficiaries. Part A is funded by payroll taxes, while Parts B and D are

funded by a combination of premiums and general revenue. In contrast, Medicaid is jointly

funded by the federal government and individual states. The federal government sets minimum

standards for Medicaid, but each state has significant discretion in setting eligibility criteria and

covered services. The federal government reimburses states for a percentage of their Medicaid

expenditures, with the percentage varying based on the state's per capita income.

Program Administration:

Medicare and Medicaid also differ in terms of program administration. Medicare is a

federal program that is administered by the Centers for Medicare & Medicaid Services (CMS).

CMS contracts with private insurance companies to provide Medicare Advantage and Part D
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coverage. In contrast, Medicaid is a joint federal-state program that is administered by individual

states. Each state has its own Medicaid agency that is responsible for setting eligibility criteria,

covered services, and provider reimbursement rates. While the federal government sets minimum

standards for Medicaid, states have significant discretion in how they administer the program.

The eligibility criteria for the two programs also differ. Medicare is available to all

Americans aged 65 years and above, regardless of their income level, as well as to people with

disabilities who have been receiving social security disability benefits for two years or more

(Kaiser Family Foundation, 2020). In contrast, Medicaid is available to individuals and families

with low income levels. The eligibility criteria vary across states, with some states extending

Medicaid coverage to people with incomes up to 138% of the federal poverty level (Kaiser

Family Foundation, 2020).

The cost of healthcare services covered by the two programs also varies. Medicare

beneficiaries pay a monthly premium for Part B coverage, with the amount depending on their

income level (Kaiser Family Foundation, 2020). Part A coverage is free for most beneficiaries,

but those who have not worked long enough to qualify for Social Security must pay a monthly

premium for it (Kaiser Family Foundation, 2020). Medicare Advantage Plans and prescription

drug coverage also require the payment of monthly premiums, deductibles, and copayments

(Kaiser Family Foundation, 2020). In contrast, Medicaid is provided free of charge to eligible

individuals and families, and there are no monthly premiums or deductibles (Kaiser Family

Foundation, 2020).

The differences between Medicare and Medicaid benefits can be attributed to their target

populations. Medicare primarily serves the elderly population and people with disabilities, who

have high healthcare needs. The program provides comprehensive coverage for a wide range of
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healthcare services, including hospitalization, outpatient services, and prescription drugs, among

others. However, the program requires the payment of monthly premiums, deductibles, and

copayments, which may be a burden for some beneficiaries (Kaiser Family Foundation, 2020).

Conclusion:

In conclusion, Medicare and Medicaid are two government-funded healthcare programs

that serve different segments of the population. While both programs aim to improve access to

healthcare, they have different eligibility criteria, scope of coverage, and funding sources. The

literature suggests that Medicaid provides more comprehensive coverage than Medicare,

particularly for low-income individuals and those requiring long-term care services. However,

both programs play an important role in ensuring that individuals have access to healthcare

services. Medicare is a federal health insurance program for individuals aged 65 years and older,

those with certain disabilities, and those with ESRD, while Medicaid is a means-tested program

that provides health coverage to low-income individuals and families.

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